Glossary of Estate Planning
Administrator: The individual or corporate fiduciary appointed by the court to manage an estate if no executor or personal representative has been appointed or if the named executor or personal representative is unable or unwilling to serve.
Advance Directive: An Advance Directive, often referred to as a living will, is a legal document that outlines an individual’s preferences for medical treatment and end-of-life care. It allows individuals to specify the medical interventions they do or do not want in specific situations.
Alternate Beneficiary: A person or organization named to receive your assets if the primary beneficiaries named in your Trust die before you do.
Annual Exclusion: Amount you can give someone each year without having to file a gift tax return or pay a gift tax.
Beneficiary: A person who will receive the benefit of property from an estate or trust through the right to receive a bequest or to receive income or trust principal over a period of time.
Business Succession: Business Succession Planning is figuring out who you are, what are your big risk factors in terms of what happens to ownership if somebody passes away or somebody leaves, and then developing a plan that’s going to solve each one of those problems proactively.
Buy-Sell Agreement: A buy-sell agreement is a written contract between two or more owners of a business or among owners of the business and the entity. It sets out rules and expectations about what will happen in the event of the death, disability, divorce, insolvency, employment termination, or retirement of any owner.
Charitable remainder trust: A tax-exempt trust created during a lifetime or at death that distributes an annuity or unitrust amount to one or more designated non-charitable beneficiaries for life or a term of years, with the remaining trust assets passing to charity upon termination of the trust.
Co-Trustees: Two or more individuals who have been named to act together in managing a trust’s assets. A corporate trustee can also be a co-trustee.
Deed: A deed is a legal document that officially transfers ownership (title) of property, usually real estate, from a “grantor” (seller) to a “grantee” (buyer). It is a tangible proof of property rights and must be signed, delivered, and typically recorded with local government offices.
Durable Power of Attorney (POA): A power of attorney that does not terminate upon the incapacity of the person making a power of attorney.
Estate Planning: Estate Planning isn’t just your will or your trust, but is a full comprehensive plan of what we can do to protect yourself, your family, your loved ones, and your assets.
Estate Taxes: Federal or state taxes on the value of assets left at death. Also called inheritance taxes or death taxes.
Executor: A person or institution appointed by a testator to carry out the terms of their will.
Financial Power of Attorney: The Financial Power of Attorney is a legal tool to ensure that your financial matters are managed according to your wishes, even if you cannot do so yourself.
Funding: The assets that will be incorporated into an estate plan.
Guardianship: Guardianship is the process to ensure that a loved one that may be incapacitated or have a special need, is taken care of. It provides you with the ability to take care of their estate, whether you are helping a parent or even a child to ensure that they have what they need to continue on in their adult or elderly life.
Healthcare Power of Attorney: A Healthcare Power of Attorney is a legal document that designates someone (your Healthcare Agent) to make medical decisions on your behalf if you become unable to communicate or make decisions for yourself.
HIPAA Authorization: Your HIPAA Authorization allows you to specify who can access your health information and for what purposes. This document is necessary when health information needs to be shared for reasons including and beyond treatment, payment, or healthcare operations.
Irrevocable Life Insurance Trust (ILIT): An Irrevocable Life Insurance Trust (ILIT) is a type of irrevocable trust that holds or “owns” an insurance policy or policies. Typically, the main and sole asset of an ILIT is a new life insurance policy purchased by the trust.
Irrevocable Trust: A trust that cannot be terminated or revoked, or otherwise modified or amended by the grantor.
Last Will and Testament: A last will and testament is a document that says exactly where you would like your things to go. It also lists guardianship for minor children.
Personal Representative: The terms “Personal Representative” and “Executor” mean the same thing. This is an individual or corporate entity that you appoint to be in charge of going to court, opening a probate (a mini lawsuit), and submitting your Will to a judge after you pass away.
Pour-Over Will: A Pour-Over Will acts as a safety net in case something is left out or forgotten from a trust. It will pour those assets into the trust so it can be governed by those rules and regulations.
Power of Attorney: A power of attorney is a legal document that allows you to appoint a trusted person to manage your financial, legal, or health affairs on your behalf.
Probate: The official legal process for administering the execution of a will, resolving an estate, and transferring the decedent’s assets to their beneficiaries.
Registered Agent: A Registered Agent is an individual or business entity designated to receive legal documents on behalf of your LLC. Essentially, the Registered Agent serves as a point of contact between your LLC and the government, ensuring that you stay informed about important legal and administrative matters.
Revocable Living Trust: A revocable trust is a trust that can be changed. So there are several different types of trusts, but this is one that you can alter or change in the future.
Successor Trustee: A Successor Trustee is the individual or entity responsible for managing a trust when the original trustee is unable or unwilling to continue doing so themselves.
Trust: A Trust is a legal arrangement where a trustee holds and manages assets for the benefit of named beneficiaries according to the grantor’s specific instructions. It allows for asset control during and after life, bypasses probate, provides privacy, and can offer tax advantages or protect assets from creditors.
Trust Advisor: A Trust Advisor is a person or entity appointed to oversee and guide the administration of a trust. Your trust advisor needs to be an independent third party – they may not be a minor or anyone who could potentially be a beneficiary or trustee of your trust.
Will: A Will is a legal document that specifies how you want your property and assets distributed, who will care for minor children, and who will manage your estate after your death, ensuring your wishes are followed instead of state law. It appoints an executor to manage the process, pay debts, and distribute assets, while also naming guardians for children and handling specific bequests.